Oil up more than 1 percent on eighth weekly U.S. crude drawdown

FILE PHOTO - Site of an oil field is seen at sunset in Karamay, Xinjiang Uighur Autonomous Region, China, May 7, 2017. Picture taken May 7, 2017. REUTERS/Stringer

NEW YORK (Reuters) - Oil prices rose on Wednesday after U.S. crude inventories declined for the eighth straight week and as a storm approached the Gulf Coast with the potential to disrupt oil and refined products output.

Brent crude futures LCOc1 settled up 70 cents to $52.57 a barrel, while U.S. West Texas Intermediate crude futures CLc1 were trading at $48.41, up 58 cents.

“Oil inventories continue their downward trend despite a significant increase in crude oil imports this week,” said Andrew Lipow, president of Lipow Oil Associates in Houston.

Still he said, the market is shrugging off the inventory draws, which are approaching 75 million barrels since March, plus another 15 million from the U.S. Strategic Petroleum Reserve.

“It continues to wait to see more confirmation from around the world that inventories are indeed declining,” Lipow said.

The market was also eyeing a tropical depression, said Gene McGillian at Tradition Energy in Stamford.

Harvey, formerly a tropical storm, has regenerated into a tropical depression and could strengthen further into a hurricane on Friday, the National Hurricane Center said.

The system is located about 470 miles (755 km) southeast of Port Mansfield, Texas with maximum sustained winds of 35 miles per hour (55 km/h), the NHC said.

Tradres have paid close attention to production from Libya’s Sharara oilfield, the conflict-riven country’s largest, where output has been seesawing.

The field remained shut on Wednesday, two Libyan oil sources told Reuters. It had restarted at least once on Tuesday amid conflicting reports about whether it had reopened.

“(The) flood of news reports makes it clear that the situation in Libya is still chaotic and that conditions in the country are still far from normal,” Commerzbank analysts wrote.

Sharara recently reached output of 280,000 barrels per day (bpd), but closed this week due to a pipeline blockade. Its production is key to Libya’s oil output, which surged above 1 million bpd in late June, about four times its level last summer.

Libya’s rising output is a headache for the Organization of the Petroleum Exporting Countries, which together with non-OPEC producers including Russia have pledged to cut around 1.8 million bpd of supplies between January this year and March 2018 in an attempt to remove a global glut.

Additional reporting by Henning Gloystein in Singapore and Karolin Schaps in Amsterdam; Editing by Marguerita Choy and Chris Reese